Recent Amendments to the Trust Law in Kenya

Recent Amendments to the Trust Law in Kenya

In 2021, the Trustees (Perpetual Succession) (Amendment) Act 2021, (the “Act”) aiming to modify the regulations of the Trustees (Perpetual Succession) Act of 1955 was signed into law. The amendment was designed to encourage and facilitate the accumulation of wealth across generations. Recently, on 24 April 2024 the same act was amended again.

The new Amendment introduced key changes to the Trustee (Perpetual Succession) Act which mainly dealt with the registration process of trusts.

Previously, the Act provided for incorporation of trustees and maintaining a register of trusts fell under the jurisdiction of the Principal Registrar designated under the Registration of Documents Act, Cap 285. Likewise, the Cabinet Secretary overseeing land affairs was responsible for formulating regulations under the TPSA.

Following the recent amendments, the Incorporation and register of trusts will be executed by the Registrar of Companies designated under the Companies Act, 2015.

Transferring these responsibilities to the Registrar of Companies is anticipated to enhance the efficiency and effectiveness of trust registration processes. Since many tasks performed by the Companies Registrar are accessible through the eCitizen platform, this change is expected to streamline procedures. Consequently, the amendment has shortened the timeframe for approving or rejecting incorporation applications from 60-90 days to within 60 days from the application’s receipt date.

The application for the registration of a trust will now be made through Form TR-1, which will be accompanied together with the following information and documents: name of the proposed trust; registered office and contact address of the proposed trust; principal objects of the proposed trust; name, designation, postal address and identification details of the proposed settlors, first trustees and/or enforcers of the proposed trust; and statement of the assets of the proposed trust together with the value of the assets.

The new amendment removes the requirement by a trust to submit a common seal together with its regulations for its custody and use for registration purposes. This is in line with the amendments made to the Companies Act, 2015 which effectively removed the requirement for companies to have common seals.

Additionally, the recent amendments delete the registration of provident funds and pension funds from the Act, which previously provided for the establishment of provident and pension funds as trusts under the Act.

Once incorporated, the trust becomes a corporate body has power to sue and be sued in its name, enter into contracts and hold and acquire land.

Should you wish to seek advice in relation to setting up a trust in Kenya please do not hesitate to contact us.